Galleon Gold Welcomes Strategic Investment by Pan American Silver and Signs an MOU for Toll Processing at the Bell Creek Mill
Galleon Gold Welcomes Strategic Investment
by Pan American Silver and Signs an MOU for
Toll Processing at the Bell Creek Mill
Toronto, Ontario--(Newsfile Corp. - August 13, 2025) -
Galleon Gold Corp.
(TSXV: GGO) (FSE: 3H90)
(the "
Company
" or "
Galleon Gold
") is pleased to announce that Pan American Silver Corp. ("
Pan
American
") has entered into a strategic investment agreement on a non-brokered private placement
basis for an unsecured convertible debt financing (the "
Debenture
") for gross proceeds of C$8,000,000
(the "
Transaction
"). In connection with the Transaction, the Company also announces that it has entered
into a memorandum of understanding (the "
MOU
") with Lake Shore Gold Corp. ("
Lake Shore Gold
"), a
wholly-owned subsidiary of Pan American, for toll processing of mineralized materials from the
Company's planned 86,500-tonne bulk sample at its 100% owned West Cache Gold Project in Timmins,
Ontario (the "
Project
" or "
West Cache
").
The Debenture
The Debenture has a term of 36 months (the "
Term
") from the date of issuance, bears interest at a rate
of 10.0% per annum, payable in cash or common shares of the Company ("
Common Shares
") at the
option of Pan American at the end of the Term, and is convertible into Common Shares at $0.45 per
share (the "
Conversion Price
"). Post conversion, Pan American would own 19.59% of the Common
Shares on a partially diluted basis and 11.30% of the Common Shares on a fully diluted basis. Pan
American will also have participation rights in any future equity or convertible debt financings to hold and
maintain up to a 19.9% fully diluted ownership position in Galleon Gold.
At any time during the Term, Pan American can convert any portion of the principal amount of the
Debenture into Common Shares at the Conversion Price. If Pan American converts any portion of the
Debenture prior to the end of the Term, the accrued interest on such portion to that date will be payable
in Common Shares and the price will be based on the higher of (i) the volume-weighted average price of
the Common Shares for the last 20 trading days on the TSX Venture Exchange (the "
TSXV
"), and (ii) the
last closing price of the Common Shares on the TSXV. The Company may, subject to Pan American's
conversion rights, repay the Debenture in whole or in part, any time following the second anniversary of
the date of issuance of the Debenture and prior to the end of the Term.
Proceeds from the Debenture will be used for surface development at the Company's planned bulk
sample at West Cache. The Debenture and underlying Common Shares will be subject to a hold period
of four months and one day, ending December 14, 2025 in accordance with applicable securities laws.
The Transaction is subject to final acceptance of the TSXV.
This news release does not constitute an offer of securities for sale in the United States. The securities
being offered have not been, nor will they be, registered under the United States
Securities Act of 1933
,
as amended, and such securities may not be offered or sold within the United States absent U.S.
registration or an applicable exemption from U.S. registration requirements.
Toll Processing and Services Agreement MOU
The Company has entered into the MOU with Lake Shore Gold for the toll processing of mineralized
materials from the Company's planned 86,500-tonne bulk sample from West Cache. The parties are
working towards a definitive agreement ("
Definitive Agreement
") for the toll processing, which is
expected to be completed in the near term.
The proposed arrangement would see material transported
to Pan American's Bell Creek Mill, located approximately 40 km east of West Cache.
The Company will
be responsible for delivery of the bulk sample to the mill, as well as the collection and arrangements for
the final product. The Company will also enter into a services agreement with Pan American, which will
provide the Company with access to Pan American's team and equipment on a mutually agreed upon
basis, providing technical support and manpower as needed.
R. David Russell, President and CEO of Galleon Gold, commented:
"Pan American is a well-
established operator in the Timmins mining camp and we welcome their strategic investment and
endorsement of the Project and of our team.
Our metallurgical testing indicates processing at the Bell
Creek Mill will yield excellent gold recoveries and dovetail well with Bell Creek's current milling
operations. Pan American has a proven template of hauling ore from their Timmins West Complex,
located adjacent to West Cache, to their Bell Creek operations. We expect the toll milling
arrangement will be beneficial to both companies and we look forward to working with their team to
finalize the Definitive Agreement and progress towards Galleon Gold's first pour."
Advisor
West Harbour Capital acted as the financial advisor to Galleon Gold on this transaction.
Planned Bulk Sample
On April 9, 2025, Ontario's Ministry of Energy and Mines accepted and filed the Company's Closure
Plan for West Cache.
The approval allows the Company to initiate an advanced exploration program at
the Project, which includes the extraction of an 86,500-tonne bulk sample.
The underground test mining program aims to provide integral information for pre-feasibility studies and
derisk the Project's progression toward future mine development by collecting data from infill and
exploratory drilling, mining method refinement, and mill processing and recovery ratios.
Figure 1
shows the location of the contiguous 11,580 ha property package in relation to producing and
past-producing mines in the West Porcupine Gold Camp.
The haulage distance between West Cache
and the Bell Creek mining operations is approximately 40 km, utilizing Provincial Highway 101 and
secondary bypass routes.
Figure 2
depicts the box cut, portal, ramp and the four stopes planned to be
mined from Zone #9 at a depth of 150 - 210 vertical meters below surface.
Zone #9 is a high-grade metasedimentary-hosted gold zone that extends from the bedrock interface to a
known depth of 350 vertical meters below surface. Gold is associated with semi-massive to massive
sulphide mineralization and has shown to be well-liberated and amenable to recoveries up to 98% (see
our press release dated April 3, 2024). Underground drilling from the bulk sample ramp is planned to
ascertain the zone's continuity at depth and its stratigraphic and structural relationship to deeper gold
zones known to exist at depths of 550 meters to over 1 kilometer.
Figure 1 - West Cache Gold Project Location
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Figure 2 - Planned Portal and Underground Workings for Bulk Sample
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Technical Content and Qualified Person
The technical content of this news release has been reviewed and approved by West Cache Gold
Project Manager Leah Page, P. Geo. (ON, NS), a "Qualified Person" as defined in National Instrument
43-101 - Standards of Disclosure for Mineral Projects.
About the West Cache Gold Project
The West Cache Gold Project is an advanced-stage gold exploration project covering approximately
11,580 ha located 13 km west of Timmins, Ontario on Provincial Highway 101.
It is situated in the
Western Porcupine Gold Camp along the Destor-Porcupine Fault corridor within the Abitibi greenstone
belt, approximately 7 km northeast of Pan American Silver's Timmins West Mine. The mining lease area
hosts the current Mineral Resource Estimate near the center, with additional exploration targets to the
north and south. The Mineral Resource Estimate is contained within the Porcupine Sedimentary Basin, a
favourable litho-structural corridor with over 5 km of strike-length on the Project. Mineralization is open in
all directions and at depth.
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About Galleon Gold
Galleon Gold is an advanced exploration and development company focused on the West Cache Gold
Project in Timmins, Ontario.
The Project is located 7 km northeast of Pan American Silver's Timmins
West Mine and 14 km southwest of the Hollinger Mine.
The Company is gearing up for its first test
mining at West Cache. The 86,500-tonne underground bulk sample is designed to provide valuable data
for pre-feasibility studies. Galleon Gold's strategy is to systematically derisk the Project while continuing
to grow the asset through grassroots exploration.
About Pan American
Pan American is a leading producer of silver and gold in the Americas, operating mines in Canada,
Mexico, Peru, Brazil, Bolivia, Chile and Argentina. It also owns the Escobal mine in Guatemala that is
currently not operating, and holds interests in exploration and development projects. Pan American has
been operating in the Americas for over three decades, earning an industry-leading reputation for
sustainability performance, operational excellence and prudent financial management. It is
headquartered in Vancouver, B.C. and its shares trade on the New York Stock Exchange and the
Toronto Stock Exchange under the symbol "PAAS".
For further information:
Galleon Gold
R. David Russell
Chairman and CEO
T. (416) 644-0066
www.galleongold.com
Forward-Looking Statements
This news release contains certain "forward-looking statements", as defined under applicable Canadian
securities laws, that reflect the current views and/or expectations of Galleon Gold with respect to the
Transaction and the Definitive Agreement, the Company's long-term strategy, proposed work, plans,
bulk sample program and other reports, including the PEA for its projects.
Forward-looking statements
are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the
business and the markets in which Galleon Gold operates.
Some of the statements contained herein
may be forward-looking statements which involve known and unknown risks and uncertainties.
Without
limitation, statements regarding potential mineralization and resources, exploration results, expectations,
plans, and objectives of Galleon Gold are forward-looking statements that involve various risks.
The
following are important factors that could cause Galleon Gold's actual results to differ materially from
those expressed or implied by such forward-looking statements: changes in the world-wide price of
mineral commodities, general market conditions and uncertainty of access to additional capital, risks
inherent in mineral exploration, delays in the receipt of government approvals, risks associated with
development, construction, mining operations and third party contractor activities, risks related to
unanticipated events related to health, safety and environmental matters. There can be no assurance that
forward-looking statements will prove to be accurate as actual results and future events may differ
materially from those anticipated in such statements.
Galleon Gold undertakes no obligation to update
such forward-looking statements if circumstances or management's estimates or opinions should
change.
The reader is cautioned not to place undue reliance on such forward-looking statements.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this release.
Not for distribution to United States Newswire Services or for dissemination in the United States
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